How many days does a company have to pay a debt after a statutory demand has been served?
21 days
The company then has 21 days after being served with the statutory demand to pay the demanded amount, reach an agreement with the creditor about the debt to the creditor’s satisfaction, or to apply to a relevant court to have the statutory demand set aside.
What to do after serving a statutory demand?
The Statutory Demand is served on the Debtor by or on behalf of the Creditor. Once the designated time elapses, the Creditor can issue (or lodge) a bankruptcy or winding-up petition depending on whether the Debtor is a Company or an Individual and use the statutory demand to support their case in those proceedings.
What happens after a statutory demand?
Whatever the situation, you must deal with a statutory demand urgently and treat it as a priority. You have 21 days to come to an arrangement with the creditor. If you do not do this, the creditor will take this as proof that you are unable to pay the debt and may then try to make you bankrupt.
What happens if a statutory demand is set aside?
If the statutory demand is neither satisfied, nor an application to Court is made for the setting aside of the statutory demand within the prescribed timeframe, by operation of the Act, the debtor company would be presumed to be insolvent, and the creditor would be entitled to make an application to Court to seek …
Can a debtor company resist a statutory demand for repayment of a debt?
Resisting a statutory demand If a company wishes to have a statutory demand set aside, under section 459G(3) it must apply to the Court within 21 days of service of the demand and it must serve the application and the supporting affidavit on the person who made the demand within that 21 day period as well.
How long do you have to enforce a statutory demand?
Individual statutory demands however, a statutory demand itself is only effective for 4 months after the date of service; if the creditor has not taken any action to issue a bankruptcy petition within 4 months from the date of service, a new statutory demand will need to be served.
Can a company set aside a statutory demand?
If you have been served with a statutory demand, as an individual or a company, you have the right to apply to the court to set it aside, pursuant to rule 10.4 of the Insolvency Rules 2016. You must act quickly, usually within 18 days, to avoid the creditor applying to bankrupt you or wind up your company.
Do statutory demands expire?
A statutory demand does not expire, if the debt is not satisfied after the 21 day period, the right to file a petition to wind-up the company arises and the requirement to pay the outstanding fee still stands.
What happens if a statutory demand is not paid?
A statutory demand is a kind of written warning from a creditor. It will state that if you don’t pay your debt or come to another arrangement that’s acceptable to the creditor, they may start court proceedings to make you bankrupt.
When can a statutory demand be set aside?
within 18 days
You can apply to the court to have a statutory demand set aside, as long as you do it within 18 days of the demand being served. The court might also consider an application outside this time limit, as long as the creditor hasn’t already asked for a bankruptcy petition to be issued.
Can you include interest in a statutory demand?
For example, where interest on a debt is claimed in a statutory demand, the demand must contain sufficient information so as to enable the debtor to ascertain the precise amount of interest that is claimed.
Can you contest a statutory demand?
Challenge a statutory demand. If you do not agree with a statutory demand you’ve been given, you can apply to challenge it and get it ‘set aside’. You can be made bankrupt or your company wound up if you ignore a statutory demand. You must apply to the court named on your statutory demand.
How long is statutory demand valid for?
four months
How long is a statutory demand valid for? If you don’t comply with a statutory demand or set it aside, the creditor has four months to petition for your bankruptcy. If a creditor wants to use a statutory demand that’s more than four months old, they’ll need the court’s permission.
Can a statutory demand be served by email?
More commonly, demands are served by email to an address known to be regularly used by the debtor. It is helpful in these cases to also send a copy by post. Once acknowledged, the debtor is unlikely to have an argument that the demand was not received.
Can a statutory demand be withdrawn?
Statutory demands can be withdrawn – but much depends on what the position is with the debt being chased and whether it is genuinely due. Whatever your situation – we have the expert team to help you. A statutory demand is not a formal court issued document.
How do you respond to a creditors statutory demand?
You have 21 days to respond to a statutory demand….To respond, you must do one of the following:
- pay the debt.
- reach an agreement with the creditor to pay the debt in the future, for example by using a Company Voluntary Arrangement.
- put your company into administration.
- apply to liquidate (‘wind up’) your company yourself.